The first is the conversion from winter to summer gasoline, which I have written about in more detail at Why Summer Gasoline Means Higher Prices. Just to be clear, this is an underlying reason that gasoline prices rise at this time every year, but it is not the reason that gas prices are higher today than they were at this time last year. We started the year at a higher level for other reasons, but summer gasoline explains why — even if you took the geopolitical factors out of the equation — that gasoline prices will normally rise from about February to May and then fall from August to November. We do notice this especially in election years, and use it to confirm our belief that politicians or oil companies are influencing prices to win elections.

The second point concerns the Keystone XL pipeline. I was asked whether I supported the pipeline, and I said that I did. This was also noted in the TPM interview I did last week. This has prompted multiple people to ask “How can you support renewable energy if you also support that pipeline?” The answer to that is pretty straightforward, and here is a thought experiment to help understand it. If you support renewable energy, do you also support current oil production operations? You might at first answer “No”, until the question becomes “Would you like to see all oil production stop today?” When the implications of what that might mean start to sink in, the answer will change to “I support phasing out oil production as we phase in renewables.” So the truth is, people who understand our dependence upon oil will support current oil production efforts, because without them large numbers of people would start to die as food can no longer be transported around the world.

So that explains my support of both Keystone and renewable energy. I foresee the possibility of a serious gap between the renewable energy we would like to produce and the energy we demand, and Keystone is an insurance policy that connects us to a friendly supply of oil. I hope that renewables ramp up and make the oil from the pipeline unnecessary, but it is there nonetheless if we need it. (On the other hand, I disagree with those who believe Keystone XL will provide any significant relief from high gasoline prices).

I also believe there has been tremendous misinformation about the pipeline, coming largely from pipeline opponents. I have discussed some of these issues in Pipelines and Tar Sands: Cure the Disease Not the Symptoms, but I will provide one example here to illustrate. Keystone opponent and NASA scientist Jim Hansen has said that the pipeline would be the “fuse to the biggest carbon bomb on the planet” and that if it is built it is “game over” for the climate. Frankly, I expect more from scientists than this sort of hyperbole, because it harms their credibility and makes it look like their decisions are agenda-based and not science-based.

A new analysis by scientists at the University of Victoria in British Columbia suggests burning all those proven reserves would release enough CO2 to warm the climate by only one 20th of a degree Celsius. Global warming to date is 15 times that. And if humanity figured out a way to burn all 1.8 trillion barrels of bitumen in the tar sands? That would warm things by 0.36 degrees Celsius.

There you have it. The “fuse to the biggest carbon bomb on the planet” and “game over” for the climate? Give me a break. The paper notes — as I have maintained for a long time — that the biggest carbon bomb on the planet is coal, and most coal is burned in Asia Pacific. But since all of this hyperbole has been wasted on the oil sands, how then do you get people concerned about all of the coal being burned in Asia Pacific, the real “carbon bomb?” This oil sands stuff is small potatoes relative to the coal, but you have already argued that the oil sands are the biggest carbon bomb.

The third point is that during the interview, Alan asked me about my upcoming book (scheduled to be released a the end of this month), and I said “the theme of the book is that there is no free lunch in our energy options. Everything has a cost.” He followed up with “So, what is the cost with something like wind or solar power?”

One of the costs that these sources have in common is that a lot of space is required for a relatively small amount of intermittent power that in most cases must be backed up by fossil fuel power. (While farming can still be done around wind turbines, the land area around is compromised in certain ways by the turbines). As I said, that doesn’t mean we shouldn’t pursue both sources (and I indicated that I thought solar power is the long term answer), but this is in fact one of the costs. The recent controversy over the BrightSource Energy’s Ivanpah solar power project was recently summarized by the Los Angeles Times in The Power Compromise (the title was originally Sacrificing the desert to save the Earth). In a nutshell the project is going to have a very large footprint relative to a nuclear power plant, for instance. That is a cost, and I strongly believe that we need to understand and discuss the costs and trade-offs of our energy options in order to make informed choices.

The fact is that energy can be a complex topic. Trying to characterize some of these issues in short sound bites might will inevitably mislead and confuse people. Some people see an issue like Keystone XL in black and white: You either support renewable energy OR you support Keystone XL. But it’s not that simple, and I just wanted to elaborate on some points from the interview to make my points clearer.

Those who are enamored of renewables and also concerned about high gasoline prices and rising electricity rates would do well to realize that renewables are currently more expensive than more conventional forms of energy and likely to remain so for some considerable time; and, that renewables are, to some extent, the cause of the rising prices and rates.

Mr. Reid and I have posted on many different renewable energy websites before where this topic has been discussed. I think it all boils down to the who, what, when, where and how we use solar. In some areas of the country some renewable technologies can be cost competitive. In others areas, not so much. One example would be solar PV in the State of California.

If you happen to live in the central to Southern part of the state and are a homeowner you are living with Time of Use [TOU] electric metering. Electric rates can vary from a non peak rate of about $.052 to a peak rate of $.33/kWh. Solar PV begins to make sense when individuals start buying electricity at peak rates. However, this too can lead to differences of opinion. If for example, a family of 4 with working parents and teenage children leave for work and school and are gone during those peak hours; then there is no one left to use it. However, if Grandma and Grandpa wanted to watch TV during the day [Grandma loves the soaps], do a load of laundry or turn on the AC when it hits 95 degrees outside; they could very easily get stuck using some peak electricity. So again, unless you are willing to make some changes in your lifestyle [when you do stuff or where you live] it becomes more of a who, what, when and where that counts. Of course our family of 4 would most likely hit some of those peak rates on the weekends.

From the production side of the equation, solar has become a valid energy choice for some public utilities like the Southern California Edison Co and Pacific Gas and Electric. These utilities have recently contracted for over 1000 megawatts of solar PV which is currently being designed and/or under development. Solar PV is also being installed on thousands of homes and hundreds of industrial buildings by small business contractors. It becomes more a matter of the specific who, what, when and where you install solar that makes a difference if it will be competitive and competitive with what.

The power purchase agreements [contracts] for these solar systems are coming in at under the cost of new combined cycle gas plants. Now a combined cycle gas plant is certainly more expensive than a peaking unit or even a coal plant. However you could never get a permit to build another coal plant in California. However if you happen to live in Montana or even Arizona where there is lots of sunshine; coal could still be cheaper if the plants already exist. Or if you lived in the Southeastern part of the U.S. where coal is king, solar would most likely be more expensive. But as our host has said many times before, in the end; solar will become our fuel of choice.

I agree with our host that solar; of various types; is the only fuel that is clean, plentiful and does not pose a significant risk to humans or our planet. From an engineering standpoint, I like the idea of having our nuclear reactor 93 million miles away which provides more than 6,000 times the energy we need to run our planet. According to what I read, that reactor should last for about another 2 billion years and there does not appear to be any need to reprocess the fuel or provide some type of long term storage.

Solar, wind, hydro, geothermal, wave, tide, river and ocean currents [did I hit them all?] all have pros and cons. They will however be here long after most of the oil, natural gas and other forms of carbon based fuels have been used and have become minor players in the energy game.

The specific energy problem that we face in the U.S. today is that economic growth is constrained by high liquid fuel costs. Growth is not constrained by high energy costs in general. Electric rates aren’t high enough to limit growth, and neither is the cost of natural gas for domestic or industrial heat. Our problem is very specific: We need cheaper sources of liquid hydrocarbons to grow our economy.

$100/bbl oil significantly restricts economic growth. Unconventional fossil fuels, such as tar sands and GtL, that are only viable when conventional oil prices are high, offer no solution. Renewable fuels, such as cellulosic and algal biofuels, that will only become viable when oil is > $150/bbl, offer no solution. The “all of the above” approach that Obama and others advocate represents a fundamental misunderstanding of the problem. We don’t need “all of the above.” We need cheaper liquid fuels.

Cheaper liquid fuels would indeed help spur growth and here is a video you might enjoy. It is about an hour in length so grab a cup of coffee and enjoy Amory Lovins speaking at Yale University. He makes several good points about how we can reduce the $1.5 trillion we are currently spending on energy. This is a forward looking big picture view of energy. I hope you enjoy it.

“Renewable fuels, such as cellulosic and algal biofuels, that will only become viable when oil is > $150/bbl, offer no solution. ”

The reason these fuels are coming in so expensive is that venture capitalists are driving the research. They want to make money rather than produce cheap fuels. Algae that make sugars or esters require expensive new investment to convert the plant-based products into transportation fuels.

Growing Botyrococcus braunii in the ocean offers the possibility of cheap hydrocarbons. Growing it will not require trillions of dollars in new investment and it should be possible to process the hydrocarbons in existing petroleum refineries or substitute them for coal in existing plants to produce electricity.

Do you know why gasoline deliveries from refineries haven fallen off a cliff the last few years? I know the refinery closures are probably adding to that trend, but they have been trending downward for a few years now. What impact will that have on gasoline prices? Thanks!

Do you know why gasoline deliveries from refineries haven fallen off a cliff the last few years?

Because gasoline demand in the U.S. has fallen off a cliff. But U.S. demand itself doesn’t much impact upon U.S. gasoline prices, since oil is a globally traded commodity. We are still paying the world price.

I enjoyed the reference to desert power plants, and I have wondered why if you put the word “solar” in front of something, that means it is green. Really? Scarring up a huge swatch of habitat is green? As compared to a small nuke plant?

As RR regularly points out, there are more tradeoffs than silver bullets in the energy world, and partisan posturing is usually a prelude to stupid commentary.

That said, the price signal does work wonders. The new Envia battery could make a difference, or some other advanced battery, as might CNG cars. There are a lot ofways to skin the cat.

I live in Western Arizona within about 60 miles of 3 solar plants either in the planning stages or under construction. One plant is about 25 North of Kingman, AZ. Another is about 20 miles North of Lake Havasu City, AZ and the other is near Interstate 10 about 70 miles North of the of the Mexican and California borders. I have visited or travel by all three [3] of these sites from time to time.

The one near Kingman, AZ is not yet under construction. It is in the process of re-design from a concentrating solar trough type plant to a design using flat plate PV collectors. The closest cities are Kingman, AZ and Las Vegas, NV. The design was changed for two reasons. Less water consumption and cost effectiveness of the flat plate collectors. When visiting the area where the plant will be built, you have to drive about 20 miles with nothing visible open desert.

The second plant near Lake Havasu City was going to be a Sterling engine concentrating solar power plant with the mirrors and collectors mounted on poles driven into the ground like pilings for a boat dock. This design would have disturbed only minor amounts of vegetation since everything was mounted above ground level. The design of this plant has also changed since the Sterling engines are no longer considered to be cost effective. It is now being designed as a flat plate PV facility and construction has not yet begun. To visit this plant site area you need to travel about 19 miles on a State highway thru open country.

The third solar plant about 100 miles south of me I pass when I travel to visit my son in California. It is several miles off the road and appears to be well into the construction phase. I have not done a close up visit to this facility but unless you were looking for it, you might never see it. It appears as a small square plot of land surrounded by thousands of acres of open land.

The one things all of these plants have in common is this. It now appears that it is more cost effective to use flat plate collectors than most other forms of solar which depend on some form of concentration. It might also be true that in some ways these newer plants using flat plate collectors are less harmful to the environment since they are not creating plumbs of hot moist air from the condensers used to cool a typical steam cycle plant.

While these solar plants certainly do take up large areas of land for all of the panels, you literally have to go looking for them. Every one of these plants are surrounded by tens of thousands of acres of open land. For example, when heading South towards Interstate 10 I can drive for 60 miles and never see a cow, tractor, or a bush higher than 5′. I am sorry but I just don’t see land use as a big deal. All you need to do is just drive along almost any highway in the Southwestern part of the U.S. to realize just how much open land we have.

HOWEVER; there are some things I don’t like about the way we are currently doing solar. I also don’t like to see large areas of the desert scraped clear of vegetation, covered with rock and surrounded by a chain link fence. And it is not because we are doing something horrible to some animal since most of those can easily be moved it because its stupid.

I just think it is STUPID the way we build these things. We first scrape the soil bare. Then fence the area. Then we dig trenches for the buss ducts/cabling. Then we pour concrete footings for buildings and support structures for the panels. They we erect the support structures, then mount the panels, finish the wiring spread rock all over the place and then sell it to some utility to run it.

Scraping the land bare is costly. Covering it with rocks is expensive. Fencing it is expensive, Pouring concrete support structures is expensive. Almost all of these expenses could be eliminated by using the driven piling method of construction. Not only that when you finished the project we should be removing the fencing and once again the wild life can roams free throughout the area. And we think we are the sharpest cheddar in the deli case.